Monday, February 11, 2008

ICICI Bank fined for credit card rejection

NEW DELHI: Faulting the ICICI Bank for denying a credit card to a practising advocate in the Capital on the ground that the profession fell in the 'negative profile' the Delhi State Consumer Disputes Redressal Commission, has slapped a fine of Rs 10 lakh on the bank.

The commission in a recent order slammed, what it termed "cavalier conduct and unpardonable negligence" on behalf of the bank and said this merited a "punitive damage of Rs 10 lakh... for not extending financial facility or even credit card on the premise that 'Designation' of an advocate has a negative profile."

The commission awarded the complainant Nivedita Sharma, a compensation of Rs 50,000 for the mental torture she had to face.

According to the complanaint, she was offered a credit card by the customer care executive of the ICICI bank and once she agreed to take the card, she was made to fill an application form and provide adequate papers including income tax returns which made her eligible for the credit facility. However, her application was rejected and returned with a note stating, "Designation — negative profile."

Pulling up the bank, the commission, in its order hit out at this practice and said that the complainant was asked to apply but when the column regarding her profession caught the eye of the bank official, he "rejected it with one stroke of a pen, "Designation — negative profile" throwing the RBI guidelines and other relevant, rational criterion to the wind without batting an eye-lid and little realizing the irreparable damage it would inflict upon the complainant and the practitioners of legal profession by demeaning it."

The bank contended that it was not their policy to refuse credit cards to lawyers and denial was case specific.

It maintained that there were conditions which must be fulfilled by the applicant and that the legal fraternity has never been denied any facility. "There is no negative marking at least for lawyers," the bank said.

The commission however, took into consideration the word, 'Designation' used in the note by the bank. "The word 'designation' has mainly two components. First, it flows from the profession of a person like advocates, engineers.Other source of 'designation' is an office held by a person either in private organization or in the government organization.

No profession except impermissible by law is a negative profile," the commission said, adding it amounted to 'corporate authoritarianism.'

The TOP consumer court in Delhi on Friday slammed banks for denying services like loans and credit cards to people of select professions, like lawyers and journalists.

The Delhi State Consumer Disputes Redressal Commission gave the order in a case of a lawyer who had complained that a bank had rejected her application for a credit card because of her profession. It imposed a fine of Rs 10 lakh on ICICI Bank for “defaming and demeaning the legal profession” by rejecting Nivedita Sharma’s application, citing she had a “negative profile”.

The court said lawyers and journalists are often denied loan facilities by banks. “The apparent reason is that lawyers and journalists do not take illegal or arbitrary acts of banks lying down and challenge them in courts. Banks know they cannot play games with them,” a bench headed by Justice JD Kapoor said.

There are more than 45,000 lawyers and 5,000 journalists in Delhi.

“Such a policy reflects the mindset of banks as private officials, peons, clerks and even vegetable vendors are extended loans but not advocates or journalists with sound financial standing,” the court said. “It is an act of corporate authoritarianism.”

The court said such discrimination should be stopped at once. The only criteria should be fulfillment of RBI guidelines and financial standing and creditworthiness of a person, it said.

It rejected ICICI’s claim that it had the discretion to choose customers.

An ICICI spokesperson said they would appeal against the order. The bank admitted that the lawyer’s documents were returned with a note, “negative profile”, but it was not an “attempt to undermine her position”.

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